ESCO Model for Energy-Efficient Pump Installation Scheme: A Case Study

Abstract

Agricultural usage forms a significant portion of approximately 20% of the electricity consumption in India, most of it through irrigation pumpsets. Studies have shown that less than 2% of irrigation pumpsets have an efficiency greater than 40%. To tap into this huge energy saving potential, various projects have been implemented under AgDSM (Agriculture Demand Side Management) in the last four decades. Pump replacement is one such initiative being given renewed focus by Energy Efficiency Services Limited. One model involves an ESCO or Energy Service Company that installs and maintains pumps and gets paid based on energy savings. We investigate this business model through a recent project. The government implemented a pilot pump replacement and maintenance project in Solapur from 2010 to 2017. Though the Solapur project is claimed to be a success, there is no formal document publicly available yet. The aim of this study is to gain an understanding of the feasibility of a third-party maintaining energy efficiency in agriculture. The model is analyzed on technical, financial, and social aspects. We investigate the basic financials, the monitoring, and verification process used to measure pump efficiency in the field, the loading of the system and resultant voltages, and the effect of farmer behavior. We find that the methodology used for energy savings has much ambiguity and hence the scheme does not truly test the ESCO model. We also find that farmer education and awareness building regarding pumping systems is important for the success of such a scheme.